February 5, 2013 Cleveland, Ohio

Transcription

1 February 5, 2013 Cleveland, Ohio

2 Momentum s Appalachian Assets 1

3 Utica Shale Joint Venture UEO Buckeye UEO Buckeye is a midstream JV in the Utica developed in conjunction with Chesapeake / Access and EVEP Project commenced in March 2012 after 15 months of negotiations Anchor producers: Chesapeake, Total and EVEP 800 MMcf/d of processing capacity and 135,000 BPD of C2+ fractionation capacity currently under construction ~$1B infrastructure investment in eastern Ohio Momentum manages construction and operation of the processing and fractionation facilities and acts as commercial lead First 200 MMcf/d processing and fractionation in service May

4 Natural Gas Sector Overview 3

5 Midstream Services Midstream services are required to gather hydrocarbons from the wellhead to a liquidity point and to condition the hydrocarbons to a commercially viable state The Utica Shale will require a range of services Gas gathering Pressure regulation and compression Dehydration removal of water vapor Gas processing and treating Natural gas liquids fractionation Natural gas liquids storage 4

6 Assets Under Development 800 MMcf/d cryogenic processing Kensington Plant Leesville Plant 5

7 Assets Under Development 800 MMcf/d cryogenic processing Kensington Plant Leesville Plant 24 gathering spine links the two processing plants; providing operational flexibility and expanding the capacity of the system 5

8 Assets Under Development 800 MMcf/d cryogenic processing Kensington Plant Leesville Plant 24 gathering spine links the two processing plants; providing operational flexibility and expanding the capacity of the system NGL gathering system delivers Y-grade NGLs from processing plants to Harrison Hub 5

9 Assets Under Development 800 MMcf/d cryogenic processing Kensington Plant Leesville Plant 24 gathering spine links the two processing plants; providing operational flexibility and expanding the capacity of the system NGL gathering system delivers Y-grade NGLs from processing plants to Harrison Hub 135,000 BPD Harrison Hub fractionation facility 870,000 barrels of NGL storage NGL to market via rail and pipeline interconnects 5

10 Harrison Hub NGL Storage 6

11 Harrison Hub Rail Facility 7

12 System Footprint 8

13 Other Midstream Companies in the Utica 9

14 Upstream Activity in the Utica Net Acreage by Operator (1) 1,400,000 1,200,000 1,000, , , , ,000 0 (1) Source: ITG Energy Research; January

15 Permit Activity Previous 12 Months (1) CHK 283 GPOR 18 ROS 16 HES 15 CNX 15 DVN 13 EVEP 12 Other 84 Total 456 (1) Source: Drilling Info 11

16 IRR Comparisons Utica Economics Are Strong (1) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% (1) Source: Jefferies & Company, Inc.; December

17 Liquids Uplift Drives Utica Economics $5.00 $4.99 / MMBtu C2: $0.40 $/MM Btu $4.00 $3.00 $2.00 $3.28 / MMBtu C3: $0.88 C4: $0.67 C5: $0.84 $1.00 Natural Gas: $3.28 Natural Gas: $2.19 $- Natual Gas Gas + NGLs 13

18 Utica NGLs End Markets Ethane (C2) Generally a feedstock to form ethylene used to make plastics Propane (C3) used for home heating and also feedstock to form propylene Components of Utica NGL Barrel Butanes (C4) seasonal use for gas supplement Pentanes plus (C5+) need in western Canada as a diluent and gasoline supplement 14

19 Production Projections (1) Source: Williams 15

20 Utica NGLs Downstream Projects Unity Pipeline (Harvest Pipeline, NiSource, Somerset Gas JV) Provides Utica condensate producers access to Western Canadian diluent market NGL line back to the Gulf Coast Two different projects that will take the NGL s and get them all the way back to the Gulf Coast consumption areas International markets Mariner East (Sunoco) E/P mix pipeline that provides producers with access to Philadelphia Marcus Hook International markets 16

21 U.S. to Become Net Gas Exporter Around

22 Utica Shale Rich Gas Type Curve 3,500 3,000 2,500 Daily Volume Mcf 2,000 1,500 1, Month 18

23 U.S. to Continue to Rely on Liquids Imports 19

24 UTICA SHALE: Get it RIGHT! Frank Tsuru, President and CEO, Momentum / M3 Midstream